Life Insurance Supervisory Levy Imposition Determination 2013

Administered by Department of the Treasury

Legislation au F2013L01306 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

Life Insurance Supervisory Levy Imposition Determination 2013

This determination relates to a levy imposed on life insurance entities by the Life Insurance Supervisory Levy Imposition Act 1998 (the Act).

This determination commences on 1 July 2013 and relates to the 2013‑14 financial year.  The Life Insurance Supervisory Levy Imposition Determination 2012 is revoked upon commencement of this determination.  Consistent with section 7 of the Acts Interpretation Act 1901, any obligation or liability incurred in previous financial years remains valid.

The determination will commence before it is registered.  Commencement prior to registration, however, does not disadvantageously affect the rights of any person as at the date of registration or impose any liability on any person in respect of anything done or omitted to be done before the date of registration.  Commencement prior to registration is therefore consistent with subsection 12(2) of the Legislative Instruments Act 2003.

Subsection 7(3) of the Act requires the Treasurer, by legislative instrument, to determine:

(a)           the maximum restricted levy amount for each financial year;

(b)          the minimum restricted levy amount for each financial year;

(c)           the restricted levy percentage for each financial year;

(ca) the unrestricted levy percentage for each financial year; and

(d)          how a life insurance company’s levy base asset is to be worked out.

This determination provides that the restricted component of the 2013‑14 levy will be calculated at 0.00786 per cent of assets held by the entity, subject to a minimum of $490 and a maximum of $1,320,000.  The unrestricted component of the 2013-14 levy will be calculated at 0.001563 per cent of assets held by the entity.

Although this determination does not allude specifically to friendly societies, they are considered as leviable bodies, as they are registered under the Life Insurance Act 1995 and consequently fall under the definition of ‘life insurance company’ of the Financial Institutions Supervisory Levies Collection Act 1998.  As subsection 16C(1) of the Life Insurance Act 1995 notes, item 11 of Schedule 8 to the Financial Sector Reform (Amendments and Transitional Provisions) Act 1999 provided that friendly societies existing then are taken to be registered under the Life Insurance Act 1995.

The finance sector has been consulted on the 2013‑14 supervisory levies through a Treasury and Australian Prudential Regulation Authority (APRA) discussion paper released on the Treasury website on 31 May 2013.  The paper discusses potential impacts of the levies on each industry sector and institution regulated by APRA.  Four submissions were received during the consultation process, and no submission specifically raised issues in relation to the Life Insurance Supervisory Levy Imposition Determination 2013.

APRA and Treasury periodically review the methodology for imposing levies on the finance industry with submissions received from industry.  The full range of issues raised in the methodology review will be considered and a formal response and position paper prepared by Treasury.  As part of the review, further consultation will be undertaken with stakeholders, with a view to responding to identified issues in the context of the 2014-15 levies process.

The Office of Best Practice Regulation has previously advised that a Regulatory Impact Statement is not required as supervisory levies are considered machinery‑of‑government in nature. 

This determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

A statement of compatibility with human rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out in Attachment 1.


Attachment 1

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Life Insurance Supervisory Levy Imposition Determination 2013

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

This determination relates to a levy imposed on life insurance entities by the Life Insurance Supervisory Levy Imposition Act 1998.

Subsection 7(3) allows the Minister to determine:

(e)           the maximum restricted levy amount for each financial year;

(f)           the minimum restricted levy amount for each financial year;

(g)          the restricted levy percentage for each financial year;

(ca) the unrestricted levy percentage for each financial year; and

(h)          how a life insurance company’s asset value is to be calculated.

 

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

 

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

Overview

The Life Insurance Supervisory Levy Imposition Determination 2013, enacted by the Commonwealth Parliament, is a legislative instrument that provides for the imposition of a supervisory levy on life insurance entities for the 2013-14 financial year, in accordance with the Life Insurance Supervisory Levy Imposition Act 1998. The Act was introduced to address the need for a mechanism to raise revenue from life insurance entities to cover the costs associated with the supervision of the industry, thereby ensuring the financial stability and integrity of the sector. This determination outlines the specific parameters for calculating the levy, including the restricted and unrestricted components, and is consistent with the policy objective of maintaining an effective supervisory regime. The determination ensures that the levy is imposed in a manner that is fair and consistent with the legislative framework, while also providing for a mechanism to review and adjust the levy methodology in future years based on stakeholder consultation and feedback.

Scope and Application

The Life Insurance Supervisory Levy Imposition Determination 2013 applies to life insurance entities as defined under the Life Insurance Act 1995, including entities such as friendly societies that are registered under the same Act and thus fall within the scope of ‘life insurance company’. This determination is concerned with the imposition of a levy for the 2013-14 financial year, calculated based on the entities' asset values, and it revokes the previous year's determination upon its commencement on 1 July 2013. It applies across the Commonwealth of Australia, overseen by the Treasurer under the Life Insurance Supervisory Levy Imposition Act 1998, and does not exclude any entities or categories from its purview. The levy is calculated with a restricted component of 0.00786 per cent of assets, subject to a minimum of $490 and a maximum of $1,320,000, and an unrestricted component of 0.001563 per cent of assets. The methodology for imposing these levies is periodically reviewed with input from industry stakeholders. The determination is a legislative instrument under the Legislative Instruments Act 2003, and it has been assessed for compatibility with human rights, concluding that it does not engage any of the applicable rights or freedoms.

Key Provisions

The Life Insurance Supervisory Levy Imposition Determination 2013 outlines the key provisions and requirements for the levy imposed on life insurance entities under the Life Insurance Supervisory Levy Imposition Act 1998. This determination, which applies to the 2013-14 financial year, revokes the previous determination and specifies the maximum, minimum, and percentage values for the restricted and unrestricted components of the levy (subsection 7(3)). It also details the calculation of a life insurance company’s levy base asset. The restricted component of the levy is set at 0.00786 per cent of the assets held by the entity, with a minimum of $490 and a maximum of $1,320,000. The unrestricted component is calculated at 0.001563 per cent of the entity’s assets. The Act imposes several obligations on the entities it governs, primarily focused on the calculation and payment of the specified levies. Life insurance companies must accurately determine their levy base assets and calculate the restricted and unrestricted components of the levy as per the determination. They must also ensure timely payment of the levy to comply with the Act. Friendly societies, which are considered leviable bodies under the Life Insurance Act 1995, are also subject to these obligations. The determination clarifies that although friendly societies are not explicitly mentioned, they fall under the definition of ‘life insurance company’ and are thus subject to the same requirements. Non-compliance with the provisions of this determination can result in various consequences. While the document does not explicitly state penalties for non-compliance, breaches of the Life Insurance Supervisory Levy Imposition Act 1998 can lead to significant penalties under the broader legislative framework governing financial institutions. These penalties can include fines and other civil or criminal sanctions, depending on the severity and intent of the breach. The specific penalties would be outlined in the main Act and any related regulations or guidelines. The determination also notes that the methodology for imposing levies on the finance industry is periodically reviewed, with stakeholder consultation and feedback taken into account. This ongoing review process ensures that the levy framework remains effective and fair, adapting to changes in the financial sector as necessary. The compatibility statement with human rights confirms that the determination does not engage any applicable rights or freedoms, ensuring that it aligns with international human rights standards.

Legal classification tags

Area of Law
Finance & Banking Law
Taxation Law
Instrument
Regulation
Concepts
Definitions & Interpretation
Commencement Provisions
Reporting & Disclosure Obligations
Regulatory Standards

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.